Internal Audit Case Study

1) According to the article authored by Mark Rupert, what are the seven best practices in the roles and responsibilities of an internal audit function?

a. The seven best practices in the roles and responsibilities of an internal audit function include:

i. Perform a risk assessment and determine the level of risk
 ii. Understand laws and regulations
 iii. Obtain and/or establish policies for specific issues and areas
 iv. Educate on the policies and procedures and communicate awareness

v. Monitor compliance with laws, regulations, and policies vi. Audit the highest risk areas
 vii. Re-educate staff on regulations and issues identified in the audit

2) Describe some general differences between the Compliance Role and the Internal Audit Role.

Both roles should ideally be independent of operations, but corporate compliance in reality owns the compliance operation policies and procedures. Internal audits have to be completely Independent. Internal audits also bring attention to the need for monitoring as a result of their auditing function. Corporate compliance ensures that monitoring and auditing occur. As far as follow-up goes, corporate compliance is responsible for such things, while internal audit is just responsible for reporting whether management responded appropriate to obtained information. Both roles are involved in compliance risk. Corporate compliance creates and implements a compliance plan to ensure that compliance risks are addressed. Internal Audit on the other hand, addresses compliance risks as part of risk based audits.

3) Define auditing and monitoring and describe the difference between the two.

a. Monitoring is the ongoing process of measuring and analyzing to ensure that quality controls are maintained. It is generally less formal than auditing and performed by the organizations staff. Auditing in contrast, is a more structured and formal approach to analyzing quality control operations. Someone who is independent of the organization performs audits. At the conclusion of an audit formal recommendations are also provided for areas of improvement.

4) List and briefly describe the elements of the 7 Component Framework Industry Standards for Auditing and Monitoring

To counter this problem, computer assisted audit techniques have been developed. These systems are able to provide a more in depth analysis of the utilized billing systems. Computer assisted audit techniques also enable highly efficient assessment of transactions. By utilizing this system, an auditor could gain a clearer picture of the revenue reporting mechanisms that are being utilized by the business office. Once the information is derived, however, its interpretation, while simpler, will still require an individual that is knowledgeable in regard to the revenue cycle